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Tuesday, November 20, 2007

Sirius shareholders approve XM deal

November 14, 2007: 07:26 AM EST

Nov. 14, 2007 (Thomson Financial delivered by Newstex) --

NEW YORK (AP) - Shareholders approved a deal Tuesday to allow Sirius Satellite Radio Inc. (NASDAQ:SIRI) to acquire its rival XM Satellite Radio Holdings Inc. (OTCBB:XMSWW) (OTCBB:XMSRZ) (NASDAQ:XMSR) for about $5 billion, but the largest hurdle has yet to come -- regulatory approval in Washington.

Shareholders of Sirius and XM had been widely expected to approve the deal, which would allow the companies to save costs on programming, acquiring subscribers and broadcasting. Shareholder advisory firms had already endorsed the deal.

More difficult will be getting the deal approved in Washington, where the Department of Justice and the Federal Communications Commission must both give their blessing. Several consumer groups have opposed the combination, saying it would create a monopoly that could hurt consumers.

Would, could someone please explain to me how a service that one has to pay for and thus means you are fully aware of the circumstances become a monopoly??? I have choices in my listening pleasures, I can listen to local radio, meaning commercials, or I can listen to satellite radio. You see there isn't a monopoly here. A monopoly is what local municipalities do when they don't allow consumers to choose between dish, antennae, and cable. Some may find this hard to believe but not so far in the past, legislation was past by local communities which outlawed antennaes and satellite television dishes. Thus this allowed cable companies to thrive by government edict.

Sirius said in a statement that more than 96 percent of the shareholder votes cast approved the acquisition, while XM said 99.8 percent of its shareholders were in favor. The companies said they still hoped to complete the deal by the end of the year.

The FCC had originally said the two satellite radio companies couldn't combine, but that rule can be changed. Sirius and XM have argued that satellite radio now faces more competition for listeners since the boom in digital listening devices like Apple Inc.'s iPod, Internet radio and cell phones that can play music.

Sirius and XM have said that a combined company would offer listeners more pricing options and greater choice and flexibility in the channel lineups they receive.

Both Sirius and XM now offer packages of music, talk, sports and other programming for a fixed rate of $12.95 a month. Many of the music channels are commercial-free, and unlike terrestrial radio, the signals can be received anywhere in the U.S.

If the deal is approved, the companies have said they would offer pricing plans ranging from $6.99 per month, for 50 channels offered by one service, up to $16.99 a month, where subscribers would keep their existing service plus choose channels offered by the other service. It isn't possible now to pick channels one by one.

The deal calls for XM shareholders to receive 4.6 shares of Sirius for every share they own, which values XM at $16.56 a share or about $5 billion, based on current share prices.

Sirius shares rose 22 cents or 6.5 percent to close at $3.63 Tuesday, while XM shares gained $1.33 or 9.7 percent to $15.06.

Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.